India’s Department of Telecommunications has stymied Bharti Airtel’s proposed acquisition of Loop, a deal which would have led to the creation of Mumbai’s largest mobile network.

Loop only operates in Mumbai and has around 3 million subscribers, while Bharti provides nationwide services and has around 4 million customers in Mumbai. The DoT has claimed that the combined 7 million subscriber network would equate to a revenue loss for the government.

The roadblock has serious implications for Loop and its subscribers, as the operator’s licence expires in less than 2 months. The firms first announced the planned acquisition in February this year and solidified the agreement in June.

India’s current number portability rules state that transferring phone numbers between operators is a voluntary process for which the user is charged INR19, with 1% of this going to the government. The DoT claims that the takeover would involve Loop’s subscribers being involuntarily ported over to Bharti, with the government losing out on the fee.